An llc, which is recognized as a business entity in every state, provides its owners personal liability protection from business debts and judgments. This new operating agreement provides how the llc will now be managed as a series llc. How to set up an illinois series llc linkedin slideshare. Illinois governor bruce rauner signed into law public act 571, effective december 20th, 2017, which reduces many illinois llc filing fees including new llc formations and annual report fees by up to 70% the new law amends the illinois limited liability company acts section 5010 which pertains to llc fees then about 6 months later in the middle of 2018, the secretary of state. In overall structure, the series llc has been described as a master llc that has separate divisions. A series llc is a form of llc that allows its members to divide the assets and operations of a parent llc into a set of child series.
Series llc ruling affirmeddistinct entity not clear. Read our what is a series llc page to learn how they can be used to protect investments and safely scale your business. Further, a new series llc operating agreement must be drafted. A series limited liability company, commonly known as a series llc and sometimes abbreviated as sllc, is a form of a limited liability company that provides liability protection across multiple series each of which is theoretically protected from liabilities arising from the other series. Form multiple separate corporations or llcs, one corporation or llc for each enterprise. A series llc can be a great way to separate your business assets and divide the responsibilities for investment and debt in different areas or divisions of your company. An example would be a company that owns several rental properties. Illinois series llc how to start and maintain a series llc in illinois.
The articles of organization must also include a provision specifically authorizing your series llc to establish series. Series llcs somewhat demystified statebystate kkos lawyers. Proposed irs reg11992109 gives some insight as proposed irs regulations. The concept is that a single entity may be formed in a state, but separate series or cells may be internally created within the llc. If you would like to learn more about the concept, you must consult an attorney. Does lower llc fees in illinois mean the end for series llcs. A series llc files a single annual report and pays a single annual fee. The series llc is only available in certain states, including illinois. You cannot form a series llc in california, but if youve done so in another state that does permit it, you can register your series llc to do business in california. How to form an llc in illinois with pictures wikihow.
On august 16, 2005, the series llc statute 805 ilcs 1803740 was added to illinois limited liability company act, making the state the fifth in the country to allow the formation of series llcs. Foreign llcs must appoint a registered agent for service of process physically located in illinois. Thats because youre subject to their rules when doing business in their state. The series llc can help organizations protect their assets from liability, and in many cases can do so with less expense and more flexibility than other structures that mitigate liability risk like the holding company or parentsubsidiary structures. In most states where you can form a series llc, you can establish individual series merely by amending your operating agreement, but some statesillinois, for examplerequire each series to register separately with the state. A series llc is a unique form of limited liability company llc in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series. In illinois, which has a specific form of articles of organization for regular llcs form llc5. A series llc allows you to form multiple minillcs, so to speak, and operate them all under a single umbrella company.
Illinois series llc how to start and maintain a series. How to start a series llc in illinois we have created a step by step guide to help business owners with the formation of their illinois series llc. Series llc understanding the series llc and its advantages. Effective august 16, 2005, a new section of the limited liability company act llc act, 805 ilcs 1803740 the series llc statute, made illinois the fifth state to allow series limited liability companies, or series llcs. In order to form a series llc in illinois, aspiring business owners should have a good understanding of the states series llc statute. If filing by mail, the state doesnt accept personal checks. Rather, it simply is invested with all the legal advantages of being treated as if it were a separate legal entity. How to form a series llc a series llc offers a special kind of liability protection to an umbrella of businesses under unified ownership. The department of business services cannot give advice as to whether a series llc would be beneficial in your circumstances. Illinois compiled statutes illinois general assembly. Llc illinois how to form an llc in illinois llc university. This naming convention is permitted by all state acts and will help ensure that the series will be respected in other states that adopt the series act once it is.
The series llc is a relatively new concept in business ownership, but the concept of multiple llcs has been around for some time. A series llc is the latest and by far most sophisticated form of business entity created. Presently, only illinois makes separate entity status available for each series of an llc. For example, if you own a taxi company, a common practice is to place each vehicle or two in its own limited liability company. It is not enough to merely file the amendment to the articles of organization with the secretary of state. Submit the form in by mail, fax, in person or online. The problem with the delaware series llc and virtually all of the other 7 states to date that have adopted series llc statutes illinois being one exception, is that a series is not defined as a separate legal entity. In the illinois model, each cell must file a certificate of designation and pay a fee for each additional protected series. Illinois statute contains most of the provisions that are found in delawares statute, which was established in 1996. Form a series llc in illinois, you also have the option to set up a series llc these are. Series llcs are currently permitted in delaware, illinois, iowa, nevada, oklahoma, puerto rico, tennessee, texas, and utah. For more information, please contact the department of business services, limited liability division at 2175248008 ext. This can separate the various properties into separate series, thus segregating the liabilities.
A series llc is a collection of llcs that are grouped under one parent llc. I wish to form a standard limited liability company which does not have the. This limited liability company agreement is made and entered into, and is effective as of this 1st day of november, 2015, by and between member one, as a member of the company as defined below, and member two, as a member of the company, and each other person as defined below who is admitted to the company. This type of limited liability company llc can have multiple series, or groups of series, within the llc, each with its own or common members, managers or llc interests i.
Like a corporation or a nonseries limited liability company, a series llc is treated as a single legal entity. How to set up an illinois series llc law office of tom sammons 502 n. To form an illinois series llc, you must submit form llc. Form a different entity for each of your assets real estate, intellectual property, and so on so that you can segregate each asset from the lawsuits and liabilities of the others. A certificate of designation may only be filed after the limited liability company has been created through the filing of articles of organization. Currently, district of columbia, illinois, iowa, kansas, minnesota, montana, nevada, north dakota, oklahoma, tennessee, texas, utah, wisconsin and puerto rico also allow the formation of series llc. To register, file application for admission to transact business, form llc45. Series llc benefits and drawbacks for your business. Income tax return for an s corporation, for illinois purposes the llc will file form il1120st, illinois small business corporation replacement tax return. The first illinois appellate court case about a series llc an entity authorized by section 374 of the limited liability company act to provide an easy way for a company to add additional layers and walls of insulation by structuring its operations and assets with a series of separate subsidiaries involved a dispute about misnomer and personal jurisdiction that provides an.
How to start a series llc in illinois how to start an llc. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc 37. Again, the requirements vary depending on the jurisdiction. A limited liability company with the ability to establish series, commonly referred to. Llc articles of organization illinois secretary of state. This site is maintained for the illinois general assembly by the legislative information system, 705 stratton building, springfield, illinois 62706 2177823944 2177822050 tty. Therefore if you form a series llc, it is best to do so in delaware. The series llc is a product of the delaware legislature, the most highly regarded body for drafting corporate laws. When you form a delaware series llc with the delaware division of corporations, the entity you form often called the master llc can be pictured as an umbrella. An llc limited liability company is a form of business ownership recognized by all u. You must use a money order or certified check made payable to the illinois secretary of state. If you previously formed your company as a traditional llc, it is possible to legally convert your llc to a series llc. The difference between the series llc structure and just establishing a separate standard llc for each property is that in most cases only the parent llc is filed and renewed at the state level. Form one series llc, with multiple cells or subllcs, one cell for each enterprise.
A series llc illinois is an option for new business entities in the state as of. The series llc is a complex entity that can be hard to understand. As used in this act, unless the context otherwise requires. This means that only the parent llc is paying filing and renewal fees. Each series operates like a separate entity with a unique name, bank account, and separate books and records. Series limited liability companies attorneys title. The series llc is a tough one to give definitive answers about. The proof of the existence of the baby llcs is in the companys operating. An llc is not a corporation, but it does provide the same liability protection as a corporation since it is separate. A few states now permit companies to form a business structure known as a series llc. We have created a step by step guide to help business owners with the formation of their illinois series llc. Each llc in your series would have its own members. Jun 10, 2010 how to set up an illinois series llc 1.
The biggest problem with series llcs is that many states including california dont have series legislation and may choose to ignore the laws of the state where the series was created. In theory, an llc can use each series to hold a separate asset, like. How to convert llc to series llc by jeffry olson, j. All other states with the series llc have followed the delaware model except for illinois, missouri, and montana, yet many states have modified it slightly. Series llc illinois how to start a series llc in illinois. To do business in illinois, all llcs organized outside of the state must register with the illinois secretary of state.
To create a series llc in illinois, you must submit articles of organization form llc5. Anniversary means that day every year exactly one or more years after. Cash is not accepted for filings with the secretary of states office. Illinois permits the organization of series llc, which has the ability to create within itself separate cells that have their own interests, liabilities and members. Though delaware was the first to form the series llc, other states are also adopting the practice. If the llc is a subchapter s corporation for federal income tax purposes, and files a u. An illinois limited liability company is formed by submitting in duplicate the certificate of organization for limited liability company, llc5.
Make checks payable to the illinois secretary of state. I wish to form a standard limited liability company which does not have the ability to establish series. How does illinois tax a limited liability corporation llc. Some depends upon the state treatment of the llc and under what jurisdiction it is formed. If the company is to be authorized to establish series, it must file a separate certificate of designation on form llc37. What is the difference between a series llc and a restricted. This application is used to create an illinois limited liability company. The delaware series llc is a limited liability company without a predetermined shape. Jan 12, 2018 a series llc can be a great way to separate your business assets and divide the responsibilities for investment and debt in different areas or divisions of your company. However, the master or parent series llc is permitted to form multiple or subs or mini limited liability companies under the framework of the master. The example of the attitude of the california franchise tax board.
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